Thursday, December 05, 2013

Raising Arizona -- Setbacks in the Grand Canyon State suggest Illinois is in a big legal hole

If you think the political battle over pension reform in Illinois was long and tough, just wait for the legal battle.

After years of wrangling, ducking and finger pointing, the General Assembly Tuesday passed a series of modifications to certain state retirement systems that Gov. Pat Quinn signed Thursday. But opponents have promised to challenge those changes in court, and from here it looks like they’ll have a good case.

Consider what’s happened in Arizona.

That state, like Illinois, is one of the handful in which public pension rights are enshrined in the state constitution as a “contractual relationship,” the benefits of which “shall not be diminished or impaired.”

Nevertheless, citing the looming burden of underfunded pensions, the Arizona legislature in April, 2011, passed a series of reforms to state retirement systems that included hikes in employee contribution levels and decreases in cost-of-living adjustments.

It was different in some ways yet similar in thrust to the reforms passed earlier this week in Springfield, and the public employees went to court.

In February, 2012, Maricopa County Superior Court Judge Eileen Willett issued a stinging rebuke to the legislature, declaring a key reform element unconstitutional in an action that had been filed by a group of schoolteachers.

“When the plaintiffs were hired as teachers, they entered a contractual relationship with the state regarding the public retirement system of which they became members,” said Willett’s written opinion. “Their retirement benefits were a valuable part of the consideration offered by their employers upon which the teachers relied when accepting employment.”

The ruling neatly seconded the argument that lawyers for public employees are certain to make in Illinois: We had a deal. Our side kept up its end of the bargain and relied on your side to do the same. The constitution compels your side to keep its word.

Judge Willett’s ruling ended up forcing the Arizona legislature not only to rescind the increase in payroll contributions, but also to reimburse employees the amount they lost.

In May 2012, the state lost again in court, this time when Maricopa County Superior Court Judge John Buttrick used a similar constitutional rationale when ruling if favor of judicial retirees who’d challenged changes in the cost-of-living formula that was part of the pension-reform effort.

That case was fast-tracked to the Arizona Supreme Court on appeal, and three other legal challenges to the reforms were put on hold pending the outcome. But despite the attempted hurry-up, the justices didn’t hear oral argument in the case until June of this year and have yet to issue their ruling.

More than two and a half years after Arizona took the step that Illinois took this week, the reforms remain in legal limbo.

Senate President John Cullerton, D-Chicago, left, voted in favor of the pension reform measures this week but voiced concerns about its constitutionality -- Photo by Zbigniew Bzdak, Chicago Tribune

Our mileage may vary, of course. But defenders of the changes to the pension law here have a big hurdle to overcome: Transcripts of the floor debates from the 1970 Illinois Constitutional Convention show that the delegates actively contemplated the situation we are now in — a seemingly unsustainable shortfall in pension funding that threatens to put a painful squeeze on state programs — and nevertheless voted to provide stronger protections for pensions than for other state contracts.

Further, the vast weight of case law in Illinois supports the position that the constitution forbids exactly what the General Assembly has just done — something underscored most muscularly in the extensively researched writing on the topic by Illinois Senate parliamentarian Eric Madiar. Madiar is also chief legal counsel for Illinois Senate President John Cullerton, who, yes, voted for the reform package this week, but not without voicing doubts about its constitutionality.

Our judges may decide that the pension crisis is so threatening to the very future of our state that it was OK for the legislature to disregard the constitution in order to solve it. Or they may identify an escape hatch in the language of the law that justifies the reform.

Or they may say, sorry, lawmakers, either amend the constitution or figure out a different way to solve the problem.

Either way, if Arizona’s experience is any guide, we’re in for years more of uncertainty.

Read the legal arguments pro and con on this topic at my updated webliography here.

Posted at 07:15:00 PM

Comments

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@MOPerina,

My comment wasn't specifically directed at you regarding the derision remark I made at the end. I'm sure you appreciate and admire the teachers in your family and those you work with regarding your children. Unfortunately, most of our critics do not respect the profession, which is evident with much of the disgust they express concerning our work and benefits.

"Space program." - the NASA Space Center open to the public is half children's playground and gift shop, and you have to pay to take the tram ride to visit a replica of the Mission Control building. They left one of three existing Saturn 5 rockets sit out in the elements for over 30 years, then expected the American taxpayers to pay several million to put an aluminum farm building over it.

"Eighth Wonder of the World.' - which is rotting inside and costs the taxpayers $50K monthly just to remain standing. The people want it torn down, but the politicians refuse to hear them.

"Rodeo." - I've seen rodeos cheaper and better at county fairs in Missouri.

"Lack of zoning means more freedom (Freeeeee-dommm!!!)." - Which means someone can open up an auto repair shop in the house next to yours and you can't do a thing to stop them.

"Easy to buy a gun." - So you can blow away your neighbor because he's playing music too loud after midnight and expect the "Castle Doctrine" to give you a "Get Out Of Jail Free" card.

"Vietnamese food." - We've got that here, just maybe not as much of it. But then, we have deep dish pizza, so Chicago wins again.

"Lack of zoning means more freedom (Freeeeee-dommm!!!)." - Which means someone can open up an auto repair shop in the house next to yours and you can't do a thing to stop them.

"Easy to buy a gun." - So you can blow away your neighbor because he's playing music too loud after midnight and expect the "Castle Doctrine" to give you a "Get Out Of Jail Free" card.

Ok, so those are more "cultural amenities" rather than necessarily "good things".

I'm hardly defending Houston--it might not make my top ten list of places in Texas I'd consider living, and Texas itself is in the bottom ten of states I'd want to live in. But contending that there isn't a single good thing about Houston is kinda silly--it's not [redacted].

"My sense is that the local economy would benefit if Chicago were more of *the* place for a major industry or two, rather than *a* place."

@JakeH:

I completely disagree. That is what makes Chicago great is that we have our fingers in so many pies, whereas towns like Houston our dominated by one industry. Look what happened to Houston in the 80s when oil prices tanked - the town LOST 10s of thousands of residents when they had no other industry that could pick up the slack. They had to move to survive. Chicago, on the other hand, has numerous industries that forge on when one sector goes down. For instance, if banking slumps, we have pharmaceuticals still going strong. If manufacturing declines, we have stocks and commodities trading.

Oh, my, Wendy, thank you for alerting me to my mistake, and with apologies to Dienne and the other commenters and readers, it was Wendy, not Dienne, firing off foolish strawman arguments and throwing her own pity party.

I regret the error. That was a heckuva rebuttal: "jpn, you're full of it. " heh.

ZORN REPLY --
A simple analogy. You offer Mr. Jones $10,000 to paint your house in August, but you tell him I can pay you $5,000 when the job is done and the last $5,000 when my tax refund comes back next spring. Mr. Jones says, well, I have an offer to paint a house today for $7,000 cash on completion, but I'll take your offer. He paints your house, then next spring you tell him, well, sorry my tax projections were off, I don't have the $5,000. You're out of luck.

The analogy is incomplete. Continuing with the story, you go about your daily routine, (you have to earn a living to pay your bills). Meanwhile, Mr. Jones approaches your spouse and makes an offer: "I see that you are running for office. I'll donate to your campaign fund, and persuade many of my friends to vote for you. In return, how about if you sweeten the renumeration the painting contract a bit?" Your spouse sees this could help, and takes the offer. It works. Mr Jones and your spouse continue to make side deals, sweetening the pay for the painting job with each of them.
When the job is complete, you look it over, and agree that Mr. Jones has done a good job. He did what was required, no more, no less. As you reach for your checkbook to pay the agreed upon balance of $5000, Mr. Jones gives you a bill for $15,000. You sputter "We agreed on a total of $10,000. Mr. Jones pulls out the contract, shows you the additions that your spouse had signed for. You say "but it is twice what we agreed on, and I didn't get anything more for the additional $10,000!" Mr. Jones replies "Too Bad, so Sad!, Your spouse agreed to the extra amount on your behalf. Pay me, or see me in court!.

I see a lot of people her diss Texas, Houston specifically with the cultural amenities argument being used. A couple of things . If you have to drive two hours to go downtown pay and arm to park, buy tickets , gas, tolls everything else then what good are those amenities to you. Especially by the time your through paying your the mortgage on your house whose value is nowhere near where it was five years ago. And pay a huge real estate to boot which comes on top of the five percent the state just took from you. So what good do any of these so called amenities do for you if you don't have the time and money to enjoy. You might as well live in Houston and keep more of your money.

I have realized that no matter what arguments are made that EZ simply believes that any change we make to to the compensation of government employees is both constitutionally and morally wrong. Once the state hires someone--as long as they are working--the terms are locked in for the lifetime of that person. This consideration trumps all others. If that is the premise, any argument I can make is worthless. What puzzles me is that EZ seems to think this is a good way to run a railroad.

ZORN REPLY --I'm saying once you strike a deal with someone, your word should be your bond, particularly when the constitution almost couldn't be clearer about the deal. I'm not necessarily defending the deal. in fact, if you read at all closely you'll know I'm not a fan of these deals.
I keep coming back to the rule of law, promises and contracts. Your answer is some variation of "Oh, but keeping our word would be a catastrophe, therefore we should break it." Or, "Well that was a bad deal, so we shouldn't have made it."

ZORN writes: A simple analogy. You offer Mr. Jones $10,000 to paint your house in August, but you tell him I can pay you $5,000 when the job is done and the last $5,000 when my tax refund comes back next spring. Mr. Jones says, well, I have an offer to paint a house today for $7,000 cash on completion, but I'll take your offer. He paints your house, then next spring you tell him, well, sorry my tax projections were off, I don't have the $5,000. You're out of luck.

The analogy is inexact. Continuing the story: You go off to work, (you have bills to pay, and a tight budget). Mr. Jones approaches your spouse and says "I see you are running for office. I'll make a donation to your campaign fund, and influence many of my friends to vote for you, if you agree to pay me a little more for the painting job". Your spouse wants to win election, so agrees. It works. They continue to make side deals, with your spouse agreeing to sweeten Mr. Jones pay with each deal.
When the job is complete, you take a look at it, and agree that Mr. Jones had completed the work to your satisfaction. As you reach for your checkbook, Mr Jones hands you a bill for $15,000. You stutter, "We both agreed that $10,000 was a fair price for the work that you did. Why are you now asking me for double that? " Mr. Jones pulls out a copy of the contract, complete with your spouses initials authorizing additional pay. He replies, "Too bad, so Sad!, Your spouse authorized the increase on your behalf! So you owe me twice the original agreement! Pay me, or I'll see you in court!"

BC, I didn't have in mind sacrificing the multiple pies. But the problem with relying on the multiple pies, maybe, is that you can take any one of those pies elsewhere pretty easily should the owners of the pies feel like it. And even if they don't feel like it, they can make a credible threat, allowing them to extort the government for special treatment to keep them here. (Look at CME.) And potential Chicago pies can demand special treatment for coming here. (Look at Boeing, or Boeing's new 777 factory that St. Louis is trying desperately to land.) This isn't an ideal position to be in -- having to beg at taxpayer expense, even if the deal is a net positive. And it's often hard to know whether it is. This is shortsighted, small-bore, small picture economic development -- of the sort politicians specialize in. Remember when Rahm, early in his term, held a press conference every time he made some deal to bring a few jobs within the city limits (which doesn't really matter for the regional economy anyway)? He stopped doing that. Maybe he didn't have anymore success stories. Or maybe he realized that every time he did that, there was some other story in that same paper about how some other business was eliminating many more jobs.

Small illustration: we're in competition with the rest of the country, a few big cities really, for film and television projects, so we offer incentives to attract that business, and we get a few projects -- enough to sustain a small local film industry always at the mercy of the whims of a few studios and directors from elsewhere. What if next year, nobody decides to come because Toronto or wherever has upped its game?

Meanwhile, does California (a very blue state, by the way) have to beg to keep its (largely unionized) film business? No. You'd be stupid to try operate a major movie studio anywhere but Los Angeles, because that's where the resources are -- the people, the talent, the money, the infrastructure, the community, the culture (used loosely). Yes, this makes L.A. somewhat vulnerable to the fortunes of that industry, but it's a pretty solid industry that can't generally be outsourced or moved, and L.A. has other pies besides (most of which are somehow related to its mega-port).

I'm pretty sure that L.A.'s economy, which is already some 15-20% bigger than Chicago's, is growing faster than ours. So is New York's (with an economy about 120% bigger), which likewise can boast signature industries -- businesses that are in New York because that's where the business is, not because it beat out Dallas in a bidding war. New York is the financial and banking capital of the world, which obviously brings along a lot of business services. We have a ton of business services (law, accounting, insurance, consulting, advertising, almost everyone you see in the Loop), but they have two or three tons. It's also the media center of the U.S. -- publishing, television, most of what you read and watch and listen to. And I'm not even mentioning fashion or theater. We have a great theater scene here, unique, far better in my opinion than New York's for-profit crap-fest for the Times Square-wandering rubes. (I'm not a big Broadway fan.) But if you want to really make it as an actor, there will probably come a time when you're strongly tempted to go west or go east. Acting is not a big employment sector, but its a microcosm: you go west or go east because, once again, that's where the business is.

Why does Chicago exist? The answer is most thoroughly and entertainingly explored in the best book about a city that I've ever read: Nature's Metropolis: Chicago and the Great West by William Cronon. When Chicago became an important city in the 19th Century, it didn't just trade commodities futures as it does today (the Chicago invention of which is itself an exciting story of financial innovation that sounds a lot like, for better or worse, modern Wall Street). Chicago traded commodities futures because it handled the commodities themselves: grain, lumber, meat. Ideally situated on the Lake and the Chicago River (connected to the Mississippi via the Illinois and Michigan Canal), it was a nascent transportation hub even before the railroad era quickly came of age and made Chicago the preeminent gateway city to the resources of the vast Western U.S. (This was back when "west" meant "midwest," which is why Northwestern University isn't in Seattle.) Chicago was the physical, commercial, and financial marketplace for the country's wealth of natural resources, symbolized by the massive grain elevators, meatpacking plants, and the Union Stockyards. When those businesses dispersed to other rising midwestern locations and mostly moved away for a variety of reasons, Chicago remained a distribution center for manufactured goods (and still does to some extent), but Sears seems like it's about to go under, the giant Montgomery Ward warehouse on the Chicago River is now made up of fancy apartments, manufacturing has largely left for distant shores, and the stuff you buy today is more likely to come through Los Angeles Harbor and be stored at one of the many Amazon or WalMart warehouses dotting the landscape. Chicago remains a transportation hub, but that status doesn't make it the center of commerce that it once did, especially as communications innovations continue to make physical location less important.

It's not all bad news. Chicago has gotten beautiful. It's no longer Nelson Algren's "woman with a broken nose" -- "you may well find lovelier lovelies, but never a lovely so real." It's no longer, in fact, Algren's City on the Make or Sandburg's City of the Big Shoulders. That nose has been fixed, for which I largely credit Richie Daley, and now it's pretty hard to find a lovelier lovely. The arts and cultural scenes mostly just keep getting better. The fact remains, though, that as the region's economy grows (slightly), its competitors grow faster. I don't have any solution to that problem, but I'd like to see it better addressed by those in a position to make a difference.

"Justice Burger, in his concurrence in US Trust v New Jersey (the 4th vote in a 4-3 decision) wrote:

“In my view, to repeal the 1962 covenant without running afoul of the constitutional prohibition against the impairment of contracts, the State must demonstrate that the impairment was essential to the achievement of an important state purpose. Furthermore, the State must show that it did not know and could not have known the impact of the contract on that state interest at the time that the contract was made.”

The subject covenant was a statutory provision considered a 'contract provision' by everyone. The IL Constitution, under a typical reading, makes the whole of the Pension Code a contract between the State and the beneficiaries. Given the history of the Pension Code and IL's pension funding, I think that Burger's standard is pretty darn high, but I do not doubt that the current Court could find the standard satisfied, OR take the minority's view of "eh, the state can change that contract". So, the possible contract clause issue would be *very* interesting, but were I betting a buck, I'd wager on "modifications allowed" by SCOTUS, *if* they took the case, which is a slim possibility."

The only way I could see it getting to the U.S. Supreme Court is if the unions challenged the bill on federal grounds, perhaps as an unconstitutional impairment of contractual obligations under the U.S. Constitution's contracts clause -- the clause you're talking about. On that ground, the contracts clause analysis you cite might come into play.

But the more immediate issue here is not whether the state's move violates the U.S. Constitution's contracts clause. It's whether it violates the Illinois Constitution's pensions clause. On *that* issue, the Illinois Supreme Court will have the last word.

I've read at least one commentator who says that these two issues are analogous and should or could be dealt with in a similar fashion -- offering a way for the pension bill to be held constitutional. This is the argument that the pensions clause should not be read to really mean what it says. It should be read, instead, to tack on an "unless" clause: pensions shall not be diminished or impaired, "unless it's necessary to serve an important state purpose." The argument is that the somewhat similar contracts impairment clause in the U.S. Constitution is interpreted by the U.S. Supreme Court to contain just such an implied limitation on its arguable plain meaning, and so this clause could be interpreted in a similar fashion.

I'm no expert on the contracts clause, but I can already see many problems with this argument.

First, the looser contracts clause reading makes sense in a way that a loose pensions clause reading would not. The contracts clause is general and sweeping. The more general and sweeping the constitutional language (and the language in the U.S. Constitution is frequently broad), the greater the warrant for discerning implicit limitations. This is because, as the Court said in this very case, an absolute reading just can't be right:

"The States must possess broad power to adopt general regulatory measures without being concerned that private contracts will be impaired, or even destroyed, as a result. Otherwise, one would be able to obtain immunity from state regulation by making private contractual arrangements. This principle is summarized in Mr. Justice Holmes' well known dictum: 'One whose rights, such as they are, are subject to state restriction, cannot remove them from the power of the State by making a contract about them.'" (That's from the United States Trust case.)

This is a species of the absurdity argument: your interpretation can't be right because it would lead to an extreme result that nobody ever intended. Can you make the same argument about the far more specific pensions clause? No. The absolute reading of the pensions clause doesn't lead to any result except the precise result plainly intended by the drafters: that is, essentially, the state can't welch on its pension promises. (Whether that applies only to "earned benefits" or not is a separate question we can put to the side, because this bill violates the clause either way.)

In fact, the loose interpretation of the pensions clause is the one that wouldn't make sense. It would allow the state to ignore the clause just because a situation arose that was the whole point of the clause in the first place: that is, the state, not having funded its pension obligations fully, finds that it would be difficult to make the promised payments and would very much prefer not to. That's not an *excuse* for bypassing the clause. The clause is *remedy* for just that situation. The loose interpretation threatens to make the clause meaningless, to remove its force in just the circumstances where it would be necessary.

Second, the contracts clause cases involving the state do not involve a constitutional guaranty as this case does. It's one thing to say that a state could not sacrifice its police powers by making a particular promise. But the whole point of constitutional provisions like this one is that they limit the state's police powers -- they say what the state may and may not do. Here, it's clear: they may not do what they're trying to do.

Third, even if we tacked on that "unless" clause, as you point out, that's a very tough standard to meet. It wasn't met in U.S. Trust. The state, via regulation, may impair current private contracts basically if they have a good reason. But they may not impair *their own* obligations unless they have a super-duper-extra-good reason, and then only in circumstances where the impairment is really, truly necessary to vindicate that objective. It's sort of like strict scrutiny, in which case the state can welch on its promises only under the sort of compelling circumstances that would allow it to do other horrible things like discriminate against blacks. In any case, I don't think that standard would apply at all. The pensions clause means just what it says -- no "unless" clause.

"ZORN REPLY -- you fail,to explain how a cut that's negligible on the group of state employees becomes ruinous when the amount of those negligible cuts is taken from the population as a whole ( perhaps not in the form of income taxes, to answer a question below). Why is it not ruinous for them if it's ruinous for the state at large? Show your work!"

A decrease in COLA would have minimal impact on year to year basis, but would add up over time. The average career Illinois teacher gets $73k/yr + healthcare + 403b + whatever income they or their spouse have + COLA. If changing the COLA formula reduces that amount by an average of $1,000/year, that might mean cumulative loss of $25,000. Multiply this over every retiree (including the 25,000 that will soon be receiving over $100k/yr) results in big savings for state, while the average career retiree is still getting an incredibly comfortable retirement, collecting close to couple million in pension alone during their non-working years.

Distributing the "burden" over the entire population rather than a subset? This is already happening, and will continue to get worse. The wealthier can find ways around it, like not having their principal residence in Illinois, so a significant portion of the burden falls on the lower to middle class, who are counting on a social security benefit significantly less than state pensions.
Baby Boomers retiring and moving out of state is going to be a huge issue for Illinois even without the additional incentive of tax increases.

I'm open to a combination of ways to resolve this, but it's disappointing the union bosses won't budge on anything. Anyone who claims to support the lower or middle class, and who cares about the future of this state, should be supporting pension reform as part of the solution, and should stop focusing on what was "promised".

ZORN REPLY-- So you're saying that it's all fine to take $1,000 a year from a subset of retirees but ruinous to enact tax increases and spending cuts across the board that take a much smaller amount from everyone to offset the need for reducing the -- sorry-- promised COLA?
I know. Our lawmakers and policymakers screwed up. They can't personally pay. But don't pretend that these contracts, promises, enshrined and protected by the constitution are just some minor handshake understanding.

"Distributing the "burden" over the entire population rather than a subset? This is already happening, and will continue to get worse. "

Thank you for pointing it out. The entire population, most of whom do not get pensions, are already having the burden place on them. We also bear most of the burden of our own retirement funding. We were largely left out any say on this deal, but we are welded to it, says Zorn and the unions, who could not care less about the general population.

ZORN REPLY -- What says we're welded to it is the constitution of the state of Illinois, which was written by people who were acutely aware of the possibility that this kind of thing would happen. You keep carrying on as though I'm making this up or want things this way.
Now, we can and there's certainly a possibility that we will say "oh, well, screw the constitution and the law, it's too expensive to do it the legal way." I admit that

“ZORN REPLY-- So you're saying that it's all fine to take $1,000 a year from a subset of retirees but ruinous to enact tax increases and spending cuts across the board that take a much smaller amount from everyone to offset the need for reducing the -- sorry-- promised COLA?”

Somewhat, yes. “all fine” and “ruinious” were your choice of words. I see no significant impact on the lives of retirees in that subset by a decrease in COLA, or capping the top tier, or eliminating pension padding. I do see low income people getting hurt by across the board increases in taxes and service cuts. I also see wealthier people making decisions based on financial climate, which eventually affects everyone else. I fully expect and accept taxes and spending cuts to be part of the mix, as they already have been, but pension reform should be part of it, also.

“But don't pretend that these contracts, promises,…”

Everyone gets that, but that’s the crux of the problem: dwelling on what was “promised” instead of looking at the big picture about what is the right thing to do at this point in time…which would be accept some reform without a big legal battle, and move on knowing that you’ll have a comfortable retirement without screwing your neighbors and those that are following you. Yeah, right.

Ted, I have a feeling that if you were asked to take significantly less than you were legally promised for the benefit of others, you'd be pretty skeptical. You'd resent cries of poverty when there are other alternatives, and you'd resent the appeal to Christian charity. I think your attitude would probably be, "Hey, this is my money. Sorry. Figure something else out."

Look how conservatives complain bitterly about tax increases, and current tax rates aren't even promised -- not remotely, not in any way -- as pension benefits are. Liberals say, "But, look at the bigger picture, consider the greater good." Conservatives say in response, "Screw that, figure something else out, not on my back, thank you very much." Liberals say, "Oh, but we're not asking for *much*, and the people we're asking can easily afford it and still live very comfortably." Conservatives say, "No, you don't understand, it's the principle. You're stealing what's mine so that you can give it to someone else without my consent. That's not right."

That argument is ridiculous when it comes to taxes, of course. It works much better, though, when it comes to pensions -- because that actually *is* "their money." It was legally promised. What the legislature is trying to do actually *is* a lot like theft.

JakeH- as I mentioned in a previous pension post, my wife is CPS teacher, so this impacts our retirement. We're more concerned about the stability of the state than exactly how much we're getting, and under every proposal, it's more than enough for a comfortable retirement.

Interesting you mention the conservative take on taxes as a comparison, as I was thinking about the same thing as I wrote my last post. In fact, the union newsletter reads like conservative talking points, such as how much teachers "contribute to the local economy because to the pensions they receive". They don't call it "trickle down", but it's basically what they're saying. I support a progressive tax system, but seems to me that's in place, except for maybe closing more loopholes.

Ted, sorry I didn't see that prior post, and I can't find it now. It's my understanding that CPS teachers aren't affected by the current bill, that Chicago pension reform is a battle yet to be fought and decided, and that this bill will not in fact impact your retirement -- at least not directly. If I'm wrong about that, my humble apologies.

Can I ask, is your wife close to retirement? One thing that I've noticed about people close to retirement or in retirement is that they tend to care more than younger folks about "exactly how much they're getting." This is because the initially distant, vague prospect of a "comfortable retirement" becomes more tangible and critical when you're in it or close to it -- something involving actual bills, plans, and calculators. Also, I think the principle of the thing feels more acute after many years of service, when one may feel that the benefits, at least as derived from those years of service, have been definitely earned and completely vested -- that it's really *your* money, no less than the vested portion of the money in your 401(k) account (all of the money you put in, plus some or all of the money your employer has put in, if any, depending on the plan's vesting requirements and how long you've worked).

In speaking for a public school teacher, be careful about speaking for all of them. If your wife has relatively few years in, you might even welcome, from the perspective of narrow self-interest, pension reform that hits retirees and older employees, because the alternative could be to stick younger, newer workers with greater burdens.

Anyway, let's assume that she is near retirement, and that you would be affected. In which case, you're a better man than I. Well, maybe not. Maybe you should stick up for yourself more! As Zorn says, quite logically I think, how is it ruinous to raise everyone's burden a teeny bit, and not ruinous to impose much greater burdens on retirees and public employees? Agreed, those burdens are not huge. But, still, they are much bigger than a more widely dispersed burden -- as in, across the taxpayers generally -- and they *are* significant. A current retiree making an average pension would see about a 20 percent total reduction in benefits after 20 more years of retirement. That's not chicken feed, especially when it comes to retirement years, when income is fixed and costs unpredictable and potentially large, say, for a non-depressing retirement home or hospice care or all the expensive things that hit old people that aren't covered by health plans or Medicare and that younger people don't like to think about because they're sad.

p.s. On the union newsletter, I don't think the concept that putting money into the hands of folks who, because they're not rich, will spend it and thus stimulate the economy, is a "trickle-down" theory or a conservative theory. The opposite, really. It's more of a liberal, Keynesian sort of idea. It's the idea behind the Obama stimulus and similar efforts. Conservatives don't think that concept works. "Trickle-down" has to do with far richer people than retired teachers, the idea being that we should tax the *top* less because the benefits to the top will accrue to all. The problem is, that's b.s., as stubborn facts keep demonstrating.

Anyway, my point was that the conservative rhetoric on taxes actually makes sense when applied to union pensions -- not the intended point at all!

A deal is a deal! All the others I claim to care about as a compassionate progressive: Sorry. I got mine, and I ain't sharing. Sorry you weren't able to bribe the guys in power to give you a deal Enshrined in the Constitution.

JakeH – thanks for the response, we were out redistributing that lucrative teacher salary at a local dining establishment, he-he.

My wife is about 8 years out from early retirement, a few years more if she wants the full package. We don’t see eye to eye on all reform, but agree there should be some, especially on a higher tiers. We both agree that reform would make it easier to plan our retirement, and if she is receiving a bit less pension, our lives won’t be significantly impacted. She doesn’t like the idea of higher property taxes as a solution, but would rather see money spent elsewhere (like Rahm’s proposed DePaul arena) used to help the cause. I don’t pretend to think we’re speaking for other state employees, but I know enough of them to know there are plenty who would be open to reform, such as cap of 100k/yr.

I have a friend who recently retired from CPF, who is happily working/living in a different state. Great move for them, bad for Illinois as this scenario becomes common place (We’re considering Louisville or Denver ourselves, although those area have their own set of problems). No Keynesian from that pension for this state. Anyway, they priced their home low to move it quick, enough that there was a bidding war. “Doesn’t matter, home was paid off, all gravy” they said. But mention the possibility of tweaking his pension and his blood would boil. I understand perfectly, “rights”, “promises”, “deals”. However, that tends to summarize the situation for me. It’s not the great financial burden of reform, it’s more about the principle. Given the situation, I think it’s time to let some of that go. I’m sure there are lots of cases where money is tighter, but in most cases those pension figures are just one portion of a much larger retirement package (403B, Home, Spouse SS, etc)…so when we’re talking about 25,000 people receiving six-figure pensions in the upcoming years, we may not be talking about the 1%, but we’re talking about some wealth. A 20% overall drop is not chump change, but if the average career employee is still collecting 1.5 to 2 million during their non-working years in pension alone, significantly more than they ever put in, that just tells me how much was over promised in the first place.

Finally, you are correct that I shouldn’t have used the term “trickle down”, a term used more by liberals than knowledgeable conservatives (not that I am one), who prefer the term “trickle up”. Different topic, different conversation. Thanks again.

Ted, thanks, I see your point, but why not offer retirees a choice, as Cullerton was proposing -- say, take less or lose health benefits or other rights that aren't protected? I think there are alternatives here that are both constitutional and that respect the sense in which a deal is a deal. I'd like to see those happen, if for no other reason than that this won't work! (At least, that's what I'm betting.)

"I'm saying once you strike a deal with someone, your word should be your bond, particularly when the constitution almost couldn't be clearer about the deal."

One final word; what's important about this deal is the participants had no choice in the matter. Not then, not now. As part of our employment, we were forced into this system with higher contributions than those required by Social Security. In fact, any deductions by SS in jobs taken before becoming educators was lost. You may have worked for years and contributed to SS, but you're not allowed any benefits, neither are you refunded these contributions before or after you retire. We not only were made certain promises, protected by the constitution, we were not allowed any other option.

Yet, our legislators felt comfortable in refusing their part of the "deal", refusing to match our contributions for decades while taxpayers benefited with the redistribution of our promised funding. Now, they've succeeded in passing a law that forces us, specifically, to pay for their abuse by losing future promised benefits.
They screwed us twice.

Wendy: please can those of us yoked by law to social security be freed from it? You must be aware that your benefit is about four times that of SS with a much lower retirement age. And while the likes of you and Zorn claim the "contract" is sacred for Illinois unions, those of us compelled by law to be in SS are subject to whatever changes Congress chooses any time. Can we please trade places? Any rational person in the SS workforce would do so.

Here's what I admire: commenters who, more than 100 comments deep into a comment thread, pull out inspirational quotes from recently-deceased global leaders, use those quotes utterly out of context from the speaker's meaning, in some failed, feeble attempt to flog people who disagree with them.

This is a particularly useful tactic in response to evidence that one is using silly straw man arguments, and throwing their own pity party, cuz, ya know, quotes from recently-deceased international leaders, and all that.

About "Change of Subject."

"Change of Subject" by Chicago Tribune op-ed columnist Eric Zorn contains observations, reports, tips, referrals and tirades, though not necessarily in that order. Links will tend to expire, so seize the day. For an archive of Zorn's latest Tribune columns click here. An explanation of the title of this blog is here. If you have other questions, suggestions or comments, send e-mail to ericzorn at gmail.com.
More about Eric Zorn

Contributing editor Jessica Reynolds is a 2012 graduate of Loyola University Chicago and is the coordinator of the Tribune's editorial board. She can be reached at jreynolds at tribune.com.